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Sunday, February 8, 2015

Selections From WIPIP: Remedies Post-Ebay, Public Enforcement of Patent Law, and a Constitutional Basis for the Subject Matter Bar

Posted by
Camilla Alexandra Hrdy

I spent the last two days enjoying my first visit to the Patent Office in Alexandria, VA and listening to a diverse array of presentations for the 2015 Works in Progress Intellectual Property Colloquium (WIPIP), hosted by the George Washington University Law School and the United States Patent and Trademark Office. Below are recaps and comments on a few talks that I found particularly important, interesting, or provocative. (These are all patent projects for no reason other than that, despite my best efforts, I did not manage to get to a single copyright session.)
Injunctions Post-Ebay

Friday morning, Christopher Seaman gave a quick and informative empirical assessment of changes since the Supreme Court's decision in eBay Inc. v. MercExchange, L.L.C. that courts need not grant injunctions as a matter of course, as they were previously doing. To determine how this has altered courts' injunction granting practice, Seaman has analyzed data on patent infringement cases between May 15, 2006 and December 13, 2013, which included 396 infringed patents. Seaman noted many important findings, but I found these three most interesting. The average overall injunction grant rate in the period post-Ebay was 72.5%. There are forum specific differences - compare DNJ (92%) to NDCAL (60%) and TX (61%). The injunction grant rate for NPEs was well below the average (only 16%). (Seaman's definition of NPE was based on the Cotropia/Kesan/Schwartz categories, i.e. large patent aggregators, failed operating or start-up companies, patent holding companies.)

Public Law Enforcement of Patents

Despite being stuck with the second to last talk of the day, Megan La Belle gave an exceptionally clear and engaging presentation on her proposal for more robust public enforcement mechanisms through which to challenge patent validity. La Belle argues that, possibly even more than in traditional public law areas, patent law could benefit from public law enforcement. The main reason she gives is the oft-discussed free rider problem in challenging patent validity: there's little monetary incentive for private parties to invest in invalidating patents versus alleging non-infringement, and they'll have to share the rewards of doing so with their competitors. She suggests several solutions. For example, she argues that the FTC or the DOJ could increase enforcement of patents outside the antitrust context, or that Congress could create a new enforcement arm within the Patent Office with independent authority to challenge patents.

Many people might disagree with La Belle's premise, which she's drawn out in earlier work, that patent law is public law rather than private law, and that public enforcement on behalf of the collective interest is therefore appropriate. Historically, private litigation has been the primary mechanism for policing patent validity in the United States. As Herb Hovenkamp has pointed out, a major reason for this is the assumption that patents are reviewed extensively pre-grant, so it would be a waste of resources, as well as a source of inter-agency conflict, if another agency were given authority to challenge the PTO's initial decisions. On the other hand, both Hovenkamp and La Belle point out that there are many reasons to doubt the assumption that patent rights are thoroughly reviewed pre-grant. Another reason to think a new public enforcement mechanism might be overkill is the fact that the AIA significantly expanded the options for inter partes and post-grant review, where parties can challenge patents in administrative proceedings rather than litigation. So even if we suspect pre-grant review is not as rigorous as supposed, it might be premature to introduce a new public enforcement mechanism before first assessing the results of that experiment. Another issue not addressed in La Belle's talk is how a public enforcement arm would actually decide which patents to pursue. Without the incentives of market competition and the risk of infringement motivating public officials' decisions to challenge patents, the risk of arbitrary or politically motivated enforcement actions seems high. On the other hand, a fascinating follow-up project might be to explore various mechanisms for linking accurate and disinterested assessments of patent validity with public enforcement actions.

Is the Patentable Subject Matter Bar a Constitutional Doctrine?

One of the most controversial arguments I encountered at WIPIP was Bryan Choi's project on patentable subject matter. Choi argues that determining whether an invention meets the patentable subject matter criteria is not, as is typically assumed, a statutory issue. §101, of course, states that patents are available for "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof[.]" Since the 19th century, the courts have constructed §101's language exceedingly liberally, holding that it prohibits certain types of subject matter not mentioned or even alluded to in §101, such as "abstract ideas" and "laws of nature." Choi provocatively argues that the proper understanding of this doctrine is as an independent exercise of judicial power separate from § 101, the Patent Act and the legislature, and linked instead to a constitutional doctrine that stems from the Progress Clause.

My main thoughts are, first, this is not what courts claim to be doing. If the subject matter bar is in fact a constitutional doctrine, it seems like the role of courts, and especially the Supreme Court, to say so. But in recent decisions in Bilski v. Kappos, Mayo v. Prometheus,AMP v. Myriad, and Alice v. CLS Bank, where the Court took an active role in defining the contours of the prohibited subject matter areas, the Court explicitly stated in all cases that the inventions at issue were not patent eligible under §101. If the Court wanted to link its actions to the Constitution it could have done so. Second, courts engage in liberal statutory construction in patent law with respect to all the patentability criteria: §101, §102, §103, §112 etc. So I am curious how Choi is planning to distinguish §101. Perhaps he is planning to argue that the Progress Clause's term "Discoveries" creates a unique constitutional limitation on the types of subject matter for which Congress can make exclusive rights available. Or perhaps he is planning to make a distinction between situations where the courts merely flesh out the meaning of words that are present in the statute – as the Federal Circuit has done with §112's words that "[t]he specification shall contain a written description of the invention," – and situations where courts add words and concepts that are not there.

In any case, whether or not one agrees with him, Choi's argument certainly sparked great interest, leading to at least one heated argument over dinner, and I truly look forward to seeing him carry the project through.

Blodgett's Hotel Fire

One of the highlights of my patent weekend actually occurred on the train ride back, discussing obscure details of the legendary fire that occurred December 15, 1836 at the old Patent Office at Blodgett's Hotel. As you probably know, every paper, book, and model in the patent office was destroyed, including 46 years worth of patents. After that they started requiring inventors to submit doubles. Although the Internet is replete with sources, the most detailed source we found was The Patent Office Pony: A History of the Early Patent Officeby Kenneth Dobbyns. I learned many things I did not know about this event. For example, immediately after the fire, the affairs of the Patent Office were temporarily conducted at the home of the newly appointed Commissioner, Henry Leavitt Ellsworth. I suspect this would not occur today.